Once again, Aesop knew this in his fable of the fox and the cat. Faced with the impending pack of savage hunting dogs bearing down on them, the fox and the cat had to escape. For the cat, this was a very easy decision to make as she bolted up a tree. However, the fox, with all his cunning know-how of the many ways he could escape, became paralysed by indecision and fell prey to the savage hounds. Faced with too many choices, the fox had analysis paralysis.
The same problem confronts us every day. The paradox of choice, as the psychologist Barry Schwartz calls it, is that the more choices we are given the less free we become because we procrastinate in trying to make the best decision.20 The whole modern world has gone choice crazy! For example, in his supermarket, Schwartz counted 285 different varieties of cookies, seventy-five iced teas, 230 soups, 175 salad dressings and forty different toothpastes. Any modern electrical appliance store is packed to the brim with so many different models with different features and functionality that we become swamped by indecision.
How many times have you gone to buy something from a large supplier only to leave empty-handed because you could not make a decision? We are so worried that we may make the wrong choice that we try to compare the different products along dimensions that we have not even considered relevant before we entered the store. Do I need it bluetooth enabled? What about the RAM? What about wi-fi? The majority of us who are not nerds find this overload of choice too much. Presented with so many options, we are unable to process the decisions efficiently. This leads to the sort of procrastination that makes us put off things that we really should do now.
Every spring, I have students who come to me to make a decision about what to undertake in their final-year research project, and they always say that they will make a start and get the bulk of it done over the summer. Certainly they all believe that they will have it ready by Christmas before the deadline in March. And yet, not one student has ever achieved this. There is always a catalogue of reasons why they never got round to do the work until the last moment, despite all their best intentions. As the English poet Edward Young (1683–1765) observed, ‘Procrastination is the thief of time.’ With all the choices available and other temptations that present themselves, we put off what we should do now until it is too late.
All this work on decision-making should clearly tell you that our self is at the mercy of the choices with which we are presented. Our capacity for decision-making is dependent on the context. If there are too many choices, then the alternatives cancel each other out and we are left with indecision. Even when we do make a decision, we are less happy because we dwell on whether we made the right choice. If we had no choice, then there is no problem and the world is to blame. But then we get depressed. However, if we chose something that does not turn out to be ideal, then that is our fault for not choosing wisely. It’s often a no-win situation.
Relativity in the Brain
Dan Ariely is a behavioural economist from Duke University who makes the argument that humans are not only poor at risk analysis but they are, in fact, predictably irrational.21 This occurred to him when he was browsing the web and found an advert for magazine subscriptions to the Economist, which had three yearly options: one, online only at $59; two, print only at $125; and, three, online and print for $125.
Clearly, the best offer was option three where you get both online and print versions for the same price as just the print alone. When he tested this offer on his students, he found that 84 per cent said they would choose option three and 16 per cent would choose option one. No one chose option two. You’d have to be crazy to choose only the print version when you could also have the online version for no extra cost. But this was a deliberate strategy by the Economist to make option three look more attractive by comparing it with a decoy. When Ariely removed option two and gave them the choice again, this time 68 per cent choose option one and only 32 per cent went with option three. The decoy had distorted the student’s sense of value. Notice how easy the decision was swayed by the context.
Ariely points out that this is the problem of relativity – humans do not make judgements in absolute values but rather in relative terms. We are always weighing up the costs and benefits of different choices and estimate values accordingly. This also explains why people tend not to choose the cheapest or most expensive option, but the one in the middle. The top price is really a decoy. This strategy is sometimes known as the Goldilocks effect, after the fairytale of the little girl who discovers that she prefers the porridge that is not too hot and not too cold. The preference for the midrange price is why retailers often have an expensive option to increase the likelihood of customers choosing a product that costs less but is not the cheapest. Relativity in decision-making reveals that we do not have an internal value-meter that tells us how much things are worth. Rather, our decisions are shaped by the external context.
Relativity does not just apply in economic decision-making but is, in fact, a fundamental principle of how our brains operate. Everything we experience is a relative process. When something seems hotter, louder, brighter, smellier or sweeter, that experience is one of relative judgement. Every change in the environment registers as a change in neural activity. At the very basic level of neural connections, this is registered as the relative change in the rate of impulses firing. In the early experiments in which scientists recorded the electrical activity of a single neuron, they inserted an electrode to measure the electrical impulses of the cell and played it through loudspeakers. When inactive, one could hear the occasional click of the background activity of the neuron as the occasional impulse was triggered. However, as soon as some stimulus was presented that excited the neuron, the clicks would register like the rapid fire of a Gatling gun.
This is how our brains interpret the world. When a change in the environment occurs, there is a relative increase or decrease in the rate at which the neurons fire, which is how intensity is coded. Furthermore, relativity operates to calibrate our sensations. For example, if you place one hand in hot water and the other in iced water for some time before immersing them both into lukewarm water, you will experience conflicting sensations of temperature because of the relative change in the receptors registering hot and cold. Although both hands are now in the same water, one feels that it is colder and the other feels warmer because of the relative change from prior experience. This process, called ‘adaptation’, is one of the organizing principles operating throughout the central nervous system. It explains why you can’t see well inside a dark room if you have come in from a sunny day. Your eyes have to become accustomed to the new level of luminance. Adaptation explains why apples taste sour after eating sweet chocolate and why traffic seems louder in the city if you normally live in the country. In short, all of the experiences we have are relative.
In fact, your sense of happiness and achievement is based on how you compare your self to others. Ariely cites the observation by the American satirist H. L. Mencken that a man is satisfied so long as he is earning more than his brother-in-law. I expect this holds true for sister-in-laws as well because relatives are the closest individuals with whom we can compare our fortunes. Relativity also explains why people become discontented when they learn that their colleagues earn a higher salary. Industrial disputes are less about wages and more about what others in the company are earning in comparison. When we discovered what the bankers were earning during the recent financial crisis, the general public was outraged. The bankers could not see the problem with their high salaries and bonuses because they were comparing themselves to other bankers who were prospering.